AT&T Uses FCC Net Neutrality Rules it Hates in Fight against FTC

By Jeff Gamet

Mar 16th, 2015 9:20 AM EDT

What do you do when a Federal agency makes changes to assert more control over your industry against your wishes? Use that change to your advantage, even though you're going to sue to get it overturned. That's exactly what AT&T is doing in its legal fight with the Federal Trade Commission over wireless data throttling.

AT&T has gone from adamantly fighting the Federal Communications Commission's plans to regulate Net Neutrality to using the new rules as justification to push for a dismissal in an FTC lawsuit over the cell service provider's wireless data throttling practices. AT&T is claiming it doesn't fall under the Federal Trade Commission's jurisdiction because it now is classified as a common carrier by the FCC.

The FTC filed a lawsuit against AT&T over the company's policies where it throttles download speeds for customers on unlimited data plans who exceed certain usage thresholds. Unlimited data plans are a hold over from the original iPhone launch where they were used to help entice new customers into buying Apple's smartphone.

AT&T eventually dropped unlimited plans and started pressuring customers who held onto theirs into changing to alternate packages with strict data caps. Part of that pressure includes slowing download speeds when customers use what AT&T sees as too much of their unlimited data plan.

AT&T argued that the FTC hasn't successfully "asserted jurisdiction over a common carrier" in the past 100 years, and that it has been expecting the FCC to take some sort of action related to data throttling.

The cell service provider offered up the same argument earlier this year before the FCC passed its new Net Neutrality policies where broadband Internet service providers, or ISPs, are classified as common carriers under Title II of the Federal Communications Act. AT&T fought the change saying the agency didn't have the authority to reclassify ISPs, and that the change would give the FCC unfettered control over all data transmitted through the Internet.

Now that the FCC has pushed forward with its reclassification plan, however, it seems AT&T isn't above using that to its advantage in court—even though the company has vowed to sue to overturn the change.

The FTC said it won't file future cases against companies classified as Title II common carriers, but that it can still pursue legal action for issues that happened before the reclassification. In other words, the FTC is saying it won't target AT&T for misleading consumers after the Title II reclassification, but it's more than happy to take the company to court for its actions before the FCC change went into effect.

For AT&T, the perfect outcome would be for the court to agree with its current argument that the FTC case should be tossed out, and then to win its case to reverse the FCC's reclassification. That would bring an end to both of its problems, and open the door for a multi-tiered Interent where it charges customers and content providers for the same data passing through its network, and it could continue to throttle data speeds for its unlimited plan customers.

Government regulation isn't always a good thing, but in this case, AT&T is practically begging for it.